This thesis consists of three essays that explore incentives and disincentives in the U.S. social safety net. In the first essay, my coauthors and I measure the size and impact of U.S. marriage taxation. Our marriage tax measure incorporates all major federal and state taxes and transfer programs. The measure is calculated as the expected percentage loss in lifetime spending from marriage, controlling for partner choice. We find an average marriage tax of 2.69 percent that is substantially higher for low-income individuals. Exploiting state-level variation, we find that the marriage taxes strongly disincentivize marriage. Among females with children, a one percentage point increase in the marriage tax rate decreases the probability of marrying by 3.69 percentage points.
The second essay evaluates the effects of free pre-kindergarten (Pre-K) programs on maternal labor force participation (LFP). Pre-K rules vary across U.S. states, and most states have income eligibility requirements. To estimate the causal effects of access to Pre-K on labor supply, we examine the change in the LFP of mothers whose child becomes age-eligible for Pre-K controlling for individual factors. We find that access to Pre-K increases overall maternal LFP by 2.3 percentage points. However, the effect is significant only for mothers with certain demographic characteristics. Our results are robust across a series of placebo tests and alternative specifications and sample restrictions.
In the third essay I estimate how the Affordable Care Act (ACA) changed the returns to work and affected labor supply decisions. First, I identify three natural experiments where the ACA changed work incentives. I find that depending on the experiment and affected population, the ACA changed weekly hours worked by between -3 and +2. Next, I use an exogenous shock to effective marginal tax rates (EMTRs) introduced by the ACA as an instrument to estimate the overall labor supply elasticity. I find it to be 0.1. Using this elasticity, I estimate the aggregate effect of the ACA on work effort. I find that, in the aggregate, the ACA did not affect US labor supply. However, for some groups the effect was economically and statistically significant.
| Identifer | oai:union.ndltd.org:bu.edu/oai:open.bu.edu:2144/44803 |
| Date | 20 June 2022 |
| Creators | Ilin, Elias |
| Contributors | Kotlikoff, Laurence J. |
| Source Sets | Boston University |
| Language | en_US |
| Detected Language | English |
| Type | Thesis/Dissertation |
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